Tax Deducted at Source (TDS) – Requirement of Permanent Account Number (PAN)

The Finance (No.2) Act, 2009 had introduced a new section 206AA in the Income Tax Act with effect from 1 April 2010, which provides that any person, whose receipts are subject to deduction of tax at source, shall mandatorily furnish his PAN to the deductor. Otherwise TDS at higher rate will be deducted. This is applicable to non-residents also. It also provides that PAN so furnished shall be indicated in all correspondence, bill, voucher and other documents which are exchanged between the both the deductee and the deductor.

 

Form no.15G or 15H furnished (for getting interest without TDS, applicable to persons other than companies, firms and non-residents) without mentioning the correct PAN of the depositor will not be accepted from 1 April 2010 onwards.